Exercise IV: Price-torent ratio (1.6) The price-torent ratio of a house is its value divided by its annual rental price. 1. The pricetorent ratio ratio of houses in New York City is around 37. If you rent an apartment for $2000 a month, how much do you expect it to be worth? If you buy an apartment for $500,000, how much would you rent it? Give reasonable answers. 2. Is it better to rent or buy a home when the price-torent ratio is high? When it is low? Why? 3. Assume that you buy a home for $300,000. As the pricetorent ratio in this area is 30, you decide to rent it for an annual rent of $10,000. Now, it is estimated that the value of your home increases by $10,000 a year, and you decide to increase the annual rent by $500 each year. Write a formula for the function p05) describing the pricetorent ratio of your home as a function of the number of years t. Explain. 4. Compute lim 19(1) . te+oo Comment, assuming that the price-torent ratio in the area remains 30